South African firms spend billions on CEE retail property

Following a six-month hiatus, Johannesburg-listed Echo Polska Properties (EPP) and Nepi Rockcastle have ploughed over €2 bn into retail real estate in Central and Eastern Europe (CEE) in the second half of 2017.

The investment drive is focused on shopping centres, with Poland claiming the largest share of the spend. The two largest transactions took place in early October.

EPP agreed to acquire eight shopping centres and four retail parks for €692 mln. The properties are located in regional cities across Poland and feature 620 retail units across a total gross leasable area (GLA) of 450,000 m2. EPP has also committed to three other transactions in recent months, including buying four retail centres from Blackstone for €167 mln. 

Nepi Rockcastle, for its part, said it would invest €461 mln to acquire two adjacent shopping centres which are being integrated as a 100,000 m2 retail centre in the Polish city of Kraków. The assets are Serenada, a 41,170 m2 shopping centre opening this month, and the adjacent 27,728 m2 Krokus shopping centre in the Bora-Komorowskiego district of Kraków.

The South African firm said the acquisition made it the owner of a top 10 super regional shopping centre in Poland and one of the largest dominant retail owners in the most populous country in CEE.

Nepi Rockcastle also acquired shopping centres in Budapest and Sofia for a total of €528 mln.

As the name suggests, the company is a merger of Nepi and Rockcastle, two Johannesburg-listed real estate companies focused on CEE. The merged company needed the downtime to consolidate the business, and as a result it did not execute investments in the first half of the 2017.

EPP was formed in early 2016 around income-producing assets owned by Polish developer Echo Investment. Johannesburg-listed Redefine Properties took a majority stake in the fledgling company that had a remit to invest in office, retail and logistics property.

Also see, Echo Polska bolsters retail asset management team

The November edition of PropertyEU Magazine features a special report on retail real estate. The report includes a roundup of retail property investment this year.


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